Decision Making: Nonrational Theories

The term “nonrational” denotes a heterogeneous class of theories of decision making designed to overcome problems with traditional “rational” theories. Nonrational theories have been denoted by various terms, including models of bounded rationality, procedural rationality, and satisfi cing. Although there is as yet no agreed-upon defi nition of “nonrational,” rational and nonrational theories typically differ on several dimensions, discussed below. The term “decision making” is used broadly here to include preference, inference, classifi cation, and judgment, whether conscious or unconscious. Nonrational theories of decision making should not be confused with theories of irrational decision making. The label “nonrational” signifi es a type of theory, not a type of outcome. In other words, the fact that nonrational theories postulate agents with emotions, limited knowledge, and little time—rather than postulating omniscient “rational” beings—need not imply that such agents fare badly in the real world.